LANCASTER — After nearly two years of frustrating negotiations with the federal Resolution Trust Corp., city officials say they have finally struck a deal to pay nearly $3.1 million to buy one failed housing project and the abandoned portion of another that had become eyesores.

In dual votes Monday night, the Lancaster City Council and Redevelopment Agency decided to pursue a so-called "friendly condemnation" of The Legends tract and the unfinished portion of the Silverado tract from the RTC. The city plans to have affordable houses completed or built on the sites.

The long delays with the RTC led to the city's saving $1.5 million on the deals from its original offers because real estate values fell, city officials said. But they nevertheless blasted the federal agency, calling it a slow-moving, bureaucratic behemoth.

"I'm surprised they can get anything done at all," said Lancaster Redevelopment Director Steve Dukett, adding that he had become "disappointed and disgruntled with the way the RTC operates" during the long process. The city's savings, Dukett noted, are a loss to the country's taxpayers.

The RTC is the federal agency charged with liquidating the assets of failed savings and loans such as the one that financed the two Lancaster housing tracts. The less money the RTC gets for its assets, the more taxpayers must shell out to repay depositors at failed thrifts.

Lancaster originally bid for the two projects in late 1991. RTC officials shortly thereafter said the city had been outbid. But those deals were never consummated. So negotiations resumed, only to be stalled again because of RTC qualms over debts associated with both properties.

Those debts, called mechanics liens, involve the many contractors left unpaid on both projects when U. S. Housing Corp., a now-defunct Burbank-based builder, halted work in late 1988 and federal officials in 1989 seized the projects' lender, Hill Financial Savings Assn. of Pennsylvania.

Dukett said the city wanted RTC to pay the debts and the RTC wanted the city to do so. That would have meant hundreds of thousands of dollars in extra city costs. Under the final deals, a judge will decide the valid claims and the amounts will be paid from the city's base purchase prices.

The city is paying $2.19 million for the 40-acre Legends tract at 30th Street West and Avenue J. The city plans to demolish the few remaining skeletons of partly built houses that stand there and pursue future housing development. No houses in the tract were ever occupied.

The city also is paying $900,000 for the 3.6-acre unfinished portion of the Silverado tract at 30th Street West and Avenue L. That consists of 21 partially built homes and two lots. The city plans to have a builder restore the 21 houses and build the remaining two for sale to buyers.